Emily's Mortgage Services LTD

The final part of our first time buyer series talks about the mortgage journey!

The mortgage journey in the UK is a process that involves several key steps, from receiving a mortgage Agreement in Principle (AIP) to completing the property purchase. Here’s a step-by-step guide to the typical mortgage journey:

Step 1: Obtain an Agreement in Principle (AIP)

• What It Is: An AIP (also called a Decision in Principle or DIP) is a statement from a lender confirming how much they are willing to lend you, based on your financial situation and credit history. It is not a guarantee of a mortgage but an indication of what you could borrow.
• Why It’s Important: Having an AIP helps you understand your borrowing capacity and shows estate agents and sellers that you’re a serious buyer.

Step 2: Property Search and Offer

• What It Is: Once you have your AIP, you can start looking for properties. After finding one you like, you’ll make an offer to the seller, either directly or through an estate agent.
• Why It’s Important: Getting the right property within your budget is a key part of the home buying process.

Step 3: Formal Mortgage Application

• What It Is: After your offer on the property is accepted, the next step is to submit a formal mortgage application to the lender (or broker). This involves submitting more detailed financial information.
• Why It’s Important: This allows the lender to assess your eligibility for the mortgage and make a formal offer.

Step 4: Valuation and Survey

• What It Is: The lender will require a valuation of the property to ensure it is worth the amount you are borrowing. In some cases, you may also want to arrange a more detailed survey to check the property’s condition.
• Why It’s Important: The valuation protects the lender, ensuring the property’s value supports the loan. A survey helps you understand the property’s condition.

Step 5: Mortgage Offer

• What It Is: Once the lender is satisfied with your application and the property’s value, they will issue a formal mortgage offer.
• Why It’s Important: This is the official confirmation that the lender will provide the mortgage. Make sure you understand all the terms before accepting.

Step 6: Legal and Conveyancing Process

• What It Is: The legal aspects of the transaction are managed by a solicitor or conveyancer. They will ensure the property is legally transferred to you and handle the exchange of contracts.
• Why It’s Important: The conveyancer or solicitor ensures that all legal procedures are followed correctly, protecting your interests during the transaction.

Step 7: Exchange of Contracts

• What It Is: The exchange of contracts is the point at which the sale becomes legally binding. At this stage, you’ll pay a deposit (usually 10% of the purchase price) and the completion date is set.
• Why It’s Important: The exchange locks both you and the seller into the sale. After this, you cannot back out without penalties.

Step 8: Completion

What It Is: Completion is the final stage, where the funds are transferred from the lender to the seller, and you officially become the property owner.